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Does Health Insurance Make You Fat?

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  • Jay Bhattacharya
  • Kate Bundorf
  • Noemi Pace
  • Neeraj Sood

Abstract

The prevalence of obesity has been rising dramatically in the U.S., leading to poor health and rising health care expenditures. The role of policy in addressing rising rates of obesity, however, is controversial. Policy recommendations for interventions intended to influence body weight decisions often assume the obesity creates negative externalities for the non-obese. We build on earlier work demonstrating that this argument depends on two important assumptions: 1) that the obese do not pay for their higher medical expenditures through differential payments for health care and health insurance, and 2) that body weight decisions are responsive to the incidence of medical care costs associated with obesity. In this paper, we test the latter proposition – that body weight is influenced by insurance coverage - using two approaches. First, we use data from the Rand Health Insurance Experiment, in which people were randomly assigned to varying levels of health insurance, to examine the effect of generosity of insurance coverage on body weight along the intensive coverage margin. Second, we use instrumental variables methods to estimate the effect of type of insurance coverage (private, public and none) on body weight along the extensive margin. We explicitly address the discrete nature of the endogenous indicator of health insurance coverage by estimating a nonlinear instrumental variables model. We find weak evidence that more generous insurance coverage increases body mass index. We find stronger evidence that being insured increases body mass index and obesity.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15163.

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Date of creation: Jul 2009
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Publication status: published as Does Health Insurance Make You Fat? , Jay Bhattacharya, M. Kate Bundorf, Noemi Pace, Neeraj Sood. in Economic Aspects of Obesity , Grossman and Mocan. 2011
Handle: RePEc:nbr:nberwo:15163

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References

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  1. David Cutler & Edward Glaeser & Jesse Shapiro, 2003. "Why Have Americans Become More Obese?," NBER Working Papers 9446, National Bureau of Economic Research, Inc.
  2. Darius Lakdawalla & Tomas Philipson, 2002. "The Growth of Obesity and Technological Change: A Theoretical and Empirical Examination," Working Papers 0203, Harris School of Public Policy Studies, University of Chicago.
  3. Inas Rashad & Sara Markowitz, 2007. "Incentives in Obesity and Health Insurance," NBER Working Papers 13113, National Bureau of Economic Research, Inc.
  4. Dhaval Dave & Robert Kaestner, 2006. "Health Insurance and Ex Ante Moral Hazard: Evidence from Medicare," NBER Working Papers 12764, National Bureau of Economic Research, Inc.
  5. Dana Goldman & Darius Lakdawalla & Neeraj Sood, 2004. "HIV Breakthroughs and Risk Sexual Behavior," NBER Working Papers 10516, National Bureau of Economic Research, Inc.
  6. Anderson, Patricia M. & Butcher, Kristin F. & Levine, Phillip B., 2003. "Maternal employment and overweight children," Journal of Health Economics, Elsevier, vol. 22(3), pages 477-504, May.
  7. Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-48, July-Aug..
  8. B. Douglas Bernheim & Antonio Rangel, 2005. "Behavioral Public Economics: Welfare and Policy Analysis with Non-Standard Decision-Makers," Discussion Papers 04-033, Stanford Institute for Economic Policy Research.
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Cited by:
  1. Harold L. Cole & Soojin Kim & Dirk Krueger, 2012. "Analyzing the Effects of Insuring Health Risks: On the Trade-off between Short Run Insurance Benefits vs. Long Run Incentive Costs," PIER Working Paper Archive 12-047, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  2. Charles J. Courtemanche & Garth Heutel & Patrick McAlvanah, 2011. "Impatience, Incentives, and Obesity," NBER Working Papers 17483, National Bureau of Economic Research, Inc.
  3. Charles J. Courtemanche & Daniela Zapata, 2012. "Does Universal Coverage Improve Health? The Massachusetts Experience," NBER Working Papers 17893, National Bureau of Economic Research, Inc.
  4. Neeraj Sood & Yanyu Wu, 2013. "The Impact of Insurance and HIV Treatment Technology on HIV Testing," NBER Working Papers 19397, National Bureau of Economic Research, Inc.
  5. John Cawley & Chad Meyerhoefer, 2010. "The Medical Care Costs of Obesity: An Instrumental Variables Approach," NBER Working Papers 16467, National Bureau of Economic Research, Inc.
  6. Bhattacharya, Jay & Packalen, Mikko, 2012. "The other ex ante moral hazard in health," Journal of Health Economics, Elsevier, vol. 31(1), pages 135-146.
  7. Manan Roy, 2011. "How Well Does the U.S. Government Provide Health Insurance?," Departmental Working Papers 1102, Southern Methodist University, Department of Economics.
  8. Fabrice Etile, 2013. "L'économie des consommations à risques au miroir des politiques de santé publique," Working Papers 221515, Institut National de la Recherche Agronomique, France.
  9. Robert Rosenman, 2009. "The Public Finance of Healthy Behavior," Working Papers 2009-18, School of Economic Sciences, Washington State University.
  10. Jay Bhattacharya & Neeraj Sood, 2011. "Who Pays for Obesity?," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 139-58, Winter.
  11. Charles L. Baum & Shin-Yi Chou, 2011. "The Socio-Economic Causes of Obesity," NBER Working Papers 17423, National Bureau of Economic Research, Inc.
  12. Jason Fletcher & David Frisvold & Nathan Tefft, 2009. "The Effects of Soft Drink Taxes on Child and Adolescent Consumption and Weight Outcomes," Emory Economics 0908, Department of Economics, Emory University (Atlanta).

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